Aerojet Rocketdyne to pay $9 mln to resolve U.S. cybersecurity allegations

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WASHINGTON, July 8 (Reuters) – Rocket engine maker Aerojet Rocketdyne ( AJRD.N ) has agreed to pay $9 million to settle allegations it misrepresented its compliance with cybersecurity requirements in federal government contracts, the Justice Department said on Friday Now.

Aerojet did not respond to requests for comment.

Aerojet provides propulsion and power systems for launch vehicles, missiles and satellites and other space vehicles to the Pentagon, NASA and other federal agencies, the Justice Department said.

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The settlement resolves a 2015 lawsuit filed by former Aerojet employee Brian Markus under provisions of the False Claims Act.

Marcus and Aerojet reached a settlement on the second day of the trial in April, the Justice Department said. He will receive $2.61 million as his share of the settlement. The settlement was approved by the US District Court in California on July 5.

A court filing from Marcus alleges that between July 2013 and September 2015, Aerojet obtained over $2.6 billion in government funds by “fraudulently procuring” Defense Department and National Aeronautics and Space Administration (NASA) contracts that were “vital components of the US national defense and space programs” by misrepresentation is in compliance with cybersecurity regulations.

After the 2013 cyber attack, Aerojet hired Marcus as a senior cybersecurity officer, but Marcus said he didn’t have the budget or staff that Aerojet had promised. He also claimed that Aerojet hid from its board in 2015 that the company was not in compliance with cybersecurity requirements.

Aerojet said in its April court defense that it “made many detailed disclosures to relevant government agencies regarding the state of compliance with these cybersecurity standards in 2014, 2015 and beyond.”

Aerojet Rocketdyne did not admit to any wrongdoing as part of the settlement.

“Whistleblowers with insider information and technical expertise can provide critical assistance in identifying willful cybersecurity failures and misconduct,” said Principal Deputy Assistant Attorney General Brian Boynton.

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Reporting by David Shepardson and Kanishka Singh in Washington; Editor Christian Schmollinger

Our Standards: The Thomson Reuters Trust Principles.

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